No holds barred in Dynasty board battle

Boardroom stoushes are never pretty, but the catfight raging over iron ore hopeful
Dynasty Metals
is getting particularly nasty.

Former Dynasty director
Lewis Tay
is trying to have directors Ian Levy,
Malcolm Carson
and Graham Anderson replaced by himself and
Nicholas Revell
.

The brouhaha, laid out in full in announcements to the Australian Securities Exchange, has its roots back in January, when Dynasty dismissed Tay (incumbent Dynasty director Richard Oh is supportive of Tay and has come under criticism from the trio of directors in Tay’s sights).

At the centre of the fight are Tay’s sharemarket trading activities, in which more than $550,000 of company funds were used by Tay in what Levy, Carson and Anderson say were “unauthorised share trades in speculative stocks" such as Cudeco, Atlas Iron, Poseidon Nickel, Fairstar Resources and Argonaut Resources.

Tay has disputed just how unaware Dynasty was about his share trading activities.

He has noted that his trading returned a $72,343 profit and a net holding of 2.5 million Argonaut shares.

It’s not just Tay’s investments that have raised the ire of the Dynasty directors. Levy, Carson and Anderson say Tay racked up several hundred thousand dollars in travel and related expenses, telephone and consultancy fees between July 2009 and December 2010 – on top of $120,000 a year in director’s fees – which made him the company’s largest cost centre outside exploration expenses.

Included among the costs was an $8000 phone bill for a single month.

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The three incumbent directors have produced a graph of Dynasty’s underperformance against its peers to support their case for remaining on the board, with the bleak performance an example of its poor record under Tay.

The arguing has even spread to Tay’s education, with prodding from the current directors prompting Tay to admit that his university degree was a bachelor of applied science, rather than a bachelor of science.

The present directors also say that Revell – described by Tay as a geologist who was “influential in helping Fortescue grow" – worked for the Andrew Forrest-led miner for six months, mainly on a small trial mining exercise.

Tay does appear to enjoy strong support from some corners of the Dynasty register, meaning the extraordinary general meeting of shareholders next week could ultimately be a tight-run thing.